Former Apple VP Reveals Ethos of Apple Stores

For those wondering what makes an Apple Inc. (NASDAQ:AAPL) store experience so wonderful, here’s one answer to the question: it’s not just about the product; the store has to create an experience.

In an recent Harvard Business post, former Apple vice president of retail and current J.C. Penney & Co. (NYSE:JCP) president Ron Johnson wrote,

¬†“Any store has to provide products people want to buy,” Johnson wrote. “That’s a given. But if Apple products were the key to the stores’ success, how do you explain the fact that people flock to the stores to buy Apple products at full price, when Wal-Mart (NYSE:WMT), Best-Buy (NYSE:BBY), and Target (NYSE:TGT) carry most of them, often discounted in various ways, and Amazon (NASDAQ:AMZN) carries them all–and doesn’t charge sales tax!”

The former exec had been responsible, with former Apple CEO Steve Jobs, for planning the first Apple store. He further explained that the well-trained Apple staff at the stores don’t just try to sell products, they also help customers on all fronts, whether it’s buying a new Apple product or trying to fix a current one. Store workers aren’t paid on commission and instead attempt to build relationships with customers by listening to their needs and seeing they leave the store satisfied.

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Johnson said,

“Compare that with other retailers, where the emphasis is on cross-selling and upselling and, basically, encouraging customers to buy more, even if they don’t want or need it.” Johnson added. “That doesn’t enrich their lives, and it doesn’t deepen the retailer’s relationship with them. It just makes their wallets lighter.”

Apple’s selling style seems to have paid off well. In an August study by research firm RetailSails, it discovered that Apple stores produce more more revenue per square foot¬†than any other U.S. retailer. Apple’s 327 stores (the number at the time of the study) had an average size of 7,900 square feet and made $5,626 per square foot, according to the firm.

In addition, Apple reported global store sales of more than $14 billion over the trailing four quarters.

With these numbers, Apple has moved past retailers such as Tiffany & Co. (NYSE:TIF), with its $2,974 per square foot sales, and Coach, Inc. (NYSE:COH) at $1,820 per square foot sales.

Next up for Apple is its new 23,000 square foot store in Manhattan’s Grand Central Terminal, set to open this week. If you do the math from the above figures, there’s the potential for a lot of money as well as foot traffic thanks to the busy venue.

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